Sometimes it’s hard not to wonder how we got from there to here. How did Bill Gates end up becoming the richest and arguably most powerful man on the planet? For anyone old enough to remember computers before the Microsoft era, it’s pretty amazing. At pretty much every step along the way they’ve had the inferior product, but still managed to prevail due to “sharp” business practices. Here’s a time-line of how MS has used leveraged monopolies to win in markets they couldn’t otherwise dominate.
Digital Research Inc.
In the early 90’s, DRDOS rose up as a popular OS. At the time, the market had been split between a clunky IBMDOS and MSDOS. Digital Research’s product, DRDOS had features that were clearly superior to the competitors. Most notably, DRDOS 6.0 was not bound by 640k ram limit that hobbled MSDOS. According to Microsoft’s own documents and internal email messages, DR DOS 6 was a superior product to their own upcoming “MS DOS 6”, it was cheaper, and it would be out first. Fortunately for them, Windows 3.1 was a big hit. All they had to do to save the OS was break the law.
Microsoft’s David Cole emailed Phil Barrett on September 30 1991:
“It’s pretty clear we need to make sure Windows 3.1 only runs on top of MS DOS or an OEM version of it,” and “The approach we will take is to detect DR DOS 6 and refuse to load. The error message should be something like ‘Invalid device driver interface.”
Sure enough, that did the trick. By leveraging one monopoly, and lying to customers who called tech-support, MS defended their OS market.
Novell acquired WordPerfect in March 1994. At the time, WordPerfect was the undisputed standard in word processing. Try as it might, Microsoft simply couldn’t make head way with its MSword. In fact, even after windows 3.1 was in wide use, WordPerfect 5.0/5.1 for DOS was hugely popular. People liked it enough to buy a DOS word processor, even though they had already paid for windows.
However, things changed sharply with the release of Windows 95. After crushing Digital Research and IBM, Microsoft truly had monopolistic power in the domain of operating systems. Microsoft used this power to steal the word processing market, and this is how: they closely guarded their APIs until Windows 95 was released, and they shipped Word for Windows on the same day. It took Novell months to perfect a Windows 95 version of WordPerfect, and in that time they lost their market share. To be sure, many loyal WP users continued to buy their product. However, with MS Office shipped pre-installed on so many computers, it was not possible to regain their market… regardless of which product was “better”.
In mid 1999, Real Media was had over 85% of the video on demand market. It was high flying IT company making waves in both the tech and general media. Both Apple and Microsoft made competing products, Apple Quicktime and the Windows Media Player, but neither were making much headway. What did Microsoft do? Can you guess? They bundled it into the OS! What does breaking the Sherman Anti-Trust act matter one more time after doing it so profitably for so long, anyway? Windows ME, had the Windows Media Player built into the OS. It can’t be uninstalled, and it’s the default choice for any video content. Real is currently on a long downhill slide, and will likely never again be dominant.
ICQ/AOL/Korea’s previously dominant messenger
Once again, Microsoft took a product in a market in which they were losing badly and bundled it into the OS. While Microsoft still trails ICQ/AOL Instant Messenger (which merged), it’s only a matter of time. Everyone who buys a windows based computer (which make up well over 90% of PCs) has the MSN Instant Messenger. Messenging being what it is, you have to use the same software everyone else does. I give it two years tops before Microsoft owns this market, and innovation in it grinds to a standstill.
Personally, I hope the EU grows a pair of balls that the US didn’t have and punishes MS for each and every law they’ve broken. As for Korea… it’s hard to say. Microsoft has suggested that it could simply stop selling in Korea. I’m sure it won’t come to that as the last thing they want to do is drive a tech-loving, mostly developed country into the arms of Apple or open source, but a small country doesn’t have the kind of power it takes to restrain Microsoft.